State Farm wants high court to consolidate 'copy cat' class action

Attorneys for State Farm Fire and Casualty filed a motion with the Illinois Supreme Court asking that a Madison County class action suit be consolidated with a similar suit pending in Cook County.

Two Illinois chiropractors filed the class action complaint on Jan. 18 against State Farm alleging the insurer lowered payments by claiming preferred provider organization (PPO) agreements, but without actually performing any of the associated obligations to those agreements.

According to the complaint, this "improper" practice is known in the insurance industry as a "silent PPO."

A PPO is a network of healthcare providers who agree to offer preferred pricing in return for receiving patient referrals. Preferred providers are also board certified and credentialed in the community where they live and work.

Frank Bemis of Alton and Richard Martis of Pekin claim State Farm improperly withheld payments from them and the class for valid insurance claims, and that they are not entitled to retain the money, nor are they otherwise entitled to any PPO discounts.

Represented by Joseph Whyte and Barney Shultz of Heyl Royster in Edwardsville, State Farm asks the seven justices to consolidate the Madison County case with the Snead v. State Farm case, a prior pending suit.

State Farm argues that the lawyers in the Bemis case previously filed three copycat putative class actions in Madison County that the Supreme Court transferred to Cook County for consolidation with the Snead case pursuant to Rule 384.

Bemis is represented by the Lakin Law Firm of Wood River, Campbell & McGrady of Godfrey, and Donald Birner of Pekin.

The insurance company claims the Bemis complaint involves the same allegations subject to the same defenses, seeks the same relief, and is brought on behalf of similar and overlapping putative classes as the prior pending Snead case.

According to State Farm, the Snead case was filed in 1999, that alleged State Farm engaged in a company-wide wrongful refusal or denial of payments for health care expenses incurred in accidents covered by its insurance policies.

State Farm argues that several months later, a different group of lawyers filed a virtually identical class action in Madison County that alleged State Farm improperly reduced payments on claims.

The Illinois Supreme Court consolidated those two cases because it presented "one or more common questions of fact or law" and because consolidation "would serve the convenience of the parties and witnesses and would promote the just and efficient conduct."

After the cases were consolidated, lawyers from the Lakin Law Firm dismissed their plaintiff and waited a few years and filed two more copycat suits in Madison County, prompting the Supreme Court to consolidate those cases also.

State Farm argues that the same group of lawyers are now trying to file yet another copycat lawsuit.

State Farm argues that the high court can "send a clear message" to the Lakin firm that it will not permit lawyers to evade its rule 384 through multiple filings of similar class actions.

The rule states, "When civil actions involving one or more common questions of fact or law are pending in different judicial circuits, and the Supreme Court determines that consolidation would serve the convenience of the parties and witnesses and would promote the just and efficient conduct of such actions, the Supreme Court may, on its own motion or on the motion of any party filed with the Supreme Court, transfer all such actions to one judicial circuit for consolidated pretrial, trial, or post-trial proceedings."

State Farm argues that for the same reasons the high court transferred the other three cases to Cook County to prevent forum shopping, to preclude an unseemly race to the courthouse for class certification, and to avoid burdensome and wasteful duplication, that it also send this case.

In the Madison County case, Bemis claims State Farm's misconduct increased its profits, while they and other class members were injured by being paid discounted fees for their services without obtaining the expected benefits of an increased flow of patients.

"By operating a silent PPO, State Farm has illegally reaped huge savings while giving no consideration to healthcare providers," the complaint states.

He claims the class has been economically damaged and has suffered monetary losses as a result of State Farm's conduct.

Bemis claims the members of the class, being geographically dispersed and numbering in the thousands, are so numerous that a single action is impracticable.

They are seeking individually and on behalf of the class for the court to award them and the class members their individual damages and attorneys' fees and allowable costs, but in no event shall it exceed $75,000 exclusive of interest.

Circuit Judge Barbara Crowder is assigned the case.